Women And Financial Responsibility - 5 Simple Ways To Build A Strong FoundationSubmitted by Retirement Choices of California on May 22nd, 2019
Women are stepping up their games in all areas of life. They are being more outspoken than ever when it comes to the creation of change—for the better. They are building networks and combining efforts like never before. And, they are breaking records.
For example, since the U.S. elections of 2016, more women have gotten involved in politics. In 2018 alone, 19 women won majority-party nominations for office. Over 400 women ran for the U.S. House of Representatives. In five Senate races the only choices for office were for women candidates. These numbers broke all previous records in U.S. elections history. Since then, four women—Sen. Kamala Harris (D-Calif.), Sen. Elizabeth Warren (D-Mass.), Sen. Kirsten Gillibrand (D-N.Y.), and Rep. Tulsi Gabbard (D-Hawaii)—have announced their intention to seek the Democratic Party’s nomination for president in the 2020 election.
Movements such as #metoo have begun to enlighten women, to inspire them, and to empower them. No longer are women defined as the weaker sex. Rather, they are being re-defined by their strengths. For much too long the skills required to manage the needs of a family and to establish a work-life balance have been diminished when, in reality, they are the same skills necessary to run an effective, efficient, and profitable business.
Women are also seeking out knowledge and practical strategies when it comes to being financially responsible on a personal level. Since the fallout from the Great Recession, women in particular are being more proactive about managing their money and creating financial foundations that can withstand the inevitable shifts in economic directions. Fewer women are getting married and more value the importance of standing on their own financial feet.
There are many sound strategies for becoming financially strong. Let’s review five of the simplest ways that will lay the foundation for achieving financial success.
1. Start Saving
Creating and maintaining a savings plan is one of the most fundamental aspects of financial responsibility. Saving your money and hedging your bets against any one of life’s various financial misfortunes will give you an abundance of options when the inevitable financial winter comes. It will also bring you peace of mind knowing that you will be financially prepared if anything does happen.
One of the most common mistakes people make when beginning their savings journey is committing to an unrealistic amount, failing, and then not saving anything at all. A better way to begin your savings journey is to start with a manageable amount. To keep the math simple, ten percent is a good starting point. Move ten percent of every dollar of income into a savings account for a period of 60 days. This is to help you establish the habit of saving. After 60 days, review both the amount you’ve accumulated and the stress that percentage put on the remaining amount available to pay for necessities. If you’re comfortable at the ten percent mark, consider increasing your amount of savings to fifteen percent for 60 days. The point here to find your comfort zone with regard to saving and to stay committed to it.
2. Begin Budgeting
Budgeting is massively important when it comes to being financially responsible. A budget is not an external force that tells you what to do with your money. It is a tool you use to tell your money where it will go. A simple budget will help you develop a baseline regarding your spending habits. You will know how much of your income goes toward the necessities and how much is available as discretionary income.
The truth is, only the extremely disciplined can stick to a budget 100 percent of the time. However, it is very important to create a clear picture of where you have chosen to have your money flow. If you do not like the picture your budget creates, you will easily be able to see where changes need to be made—either in reducing expenses or increasing income. Take advantage of this extremely powerful tool.
3. Generate Alternate Sources of Income
Nearly 37 percent of Americans now have some sort of side hustle for generating additional income. Having more than one source of income is something that is accessible to all. With the internet, anything is possible. Barriers that may have limited people from generating alternate sources of income are gone. The rewards can be fantastic for anyone who is willing to gain the necessary knowledge and put in the work to generate an online income. The greatest part about generating income online is that it can be done from anywhere and can revolve around something you are passionate about.
4. Increase Spending Awareness
Much like how people tend to have “trigger foods” that cause them to overeat, people also have “trigger” items or situations that cause them to overspend or to spend unwisely. Whether it is having a collectible hobby, being an experience junkie, or indulging in “retail therapy,” know that you can control your spending. Spending awareness involves knowing when, where, and on what you spend your money. With awareness, it is possible to create mental, emotional, or even physical barriers to avoid those items or situations.
5. Seek Financial Planning Assistance
Financial planners are not just for the wealthy. Their mission is to educate you about effective financial planning strategies and to develop a plan that is specific to your situation and needs. If you are feeling overwhelmed about which beginning steps to take when it comes to financial responsibility, give us a call. We will provide you with the knowledge and tools to fully take control of your financial future. Reaching out to a financial advisor is not only helpful in the moment but can equip you with the tools and tactics necessary to maintain financial independence for the remainder of your life.
Although following the strategies covered here is not a guaranteed way to become rich, they are an effective starting point to grant yourself the personal power that comes with financial independence. If you are ready to take your financial future into your own hands, but need additional guidance, consider working with Retirement Choices of California to plan your journey to financial success.